Cryptocurrency exchange Coinbase has rolled out a crypto lending service for institutional investors in the United States, reportedly aiming to capitalize on massive failures in the crypto lending market.
Coinbase Prime, the lending platform, offers a variety of services to institutional investors, including margin lending, short-selling, and over-the-counter trading. The platform also provides access to Coinbase’s custody services, which allow institutions to store their crypto assets securely.
The launch of Coinbase Prime comes at a time when the crypto lending market is reeling from a series of high-profile failures. In June, Celsius Network, a major crypto lending platform, froze withdrawals and transfers for its users, citing “extreme market conditions.” In July, Three Arrows Capital, a crypto hedge fund, filed for bankruptcy after defaulting on a loan.
These failures have raised concerns about the safety of crypto lending platforms. However, Coinbase has said that it is confident in its ability to offer a safe and secure lending platform for institutional investors.
“We believe institutional financing services backed by thoughtful risk management programs will usher in new waves of capital and fuel the next crypto expansion,” said Brett Tejpaul, head of institutional products at Coinbase.
Coinbase Prime is currently only available to accredited investors in the United States. However, the company plans to expand the platform to other jurisdictions in the future.
The launch of Coinbase Prime is a sign that the crypto lending market is still growing, despite the recent failures. It remains to be seen whether Coinbase will be able to succeed where others have failed. However, the company’s reputation and track record in the crypto industry give it a good chance of success.
In addition to Coinbase, other crypto exchanges are also offering lending services to institutional investors. These include Binance, Kraken, and Gemini. The growth of the crypto lending market is a sign that institutional investors are becoming more comfortable with the asset class. As the market matures, it is likely that more and more lending platforms will emerge.
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